Intelligent document processing (IDP) has become an increasingly popular solution for streamlining complex document review processes and extracting valuable information from bank documents. Next-Gen IDP solutions offer unprecedented capabilities in automating manual review tasks and improving audit capability, allowing financial institutions to reduce their efficiency ratios and improve their overall profitability.
In this article, we’ll explore how next-generation IDP solutions can help banks reduce their efficiency ratios by streamlining tedious document review tasks and helping them identify discrepancies in large volumes of invoices, contracts, and other important documents quickly. We’ll also discuss the benefits that these solutions bring, such as cost savings associated with reduced manual effort and improved accuracy levels of audits thanks to AI technologies.
What is the Bank Efficiency Ratio, and Why Does It Matter?
The Bank Efficiency Ratio (BER) is a metric that measures a bank’s operational efficiency by comparing its non-interest expenses to its total revenue. A lower BER indicates that a bank is operating more efficiently. To reduce the BER, a bank can focus on reducing its non-interest expenses, such as administrative costs and operating expenses, while increasing its revenue streams. Some strategies that can be used to achieve this include:
- Streamlining operations and processes to reduce costs and improve efficiency.
- Automating manual processes to reduce labor costs.
- Implementing cost-saving technologies such as artificial intelligence, blockchain, and big data analytics.
- Outsourcing non-core functions to third-party providers to reduce expenses.
- Reducing branch network and using digital channels to reach customers
- Increasing cross-selling of products and services to existing customers.
- Optimizing the product mix and pricing strategy to increase revenue.
- Reducing non-performing assets (NPAs) and improving asset quality.
- Improving the risk management processes to reduce the risk of losses.
- Improving the governance and compliance systems to reduce the risk of regulatory fines and penalties.
- Encouraging employee engagement and motivation to reduce staff turnover.
- Developing strategic partnerships with other organizations to share resources and reduce costs.
- Overall, combining cost-cutting measures and revenue-generating strategies can help banks reduce their BER, making them more efficient and profitable in the long run.
How can Intelligent Document Processing help reduce Bank Efficiency Ratio?
Bank efficiency ratio is a key indicator of how efficiently a financial institution can manage its operations. Although it’s important for banks to have an efficient operation, the task of managing and analyzing large amounts of data can be time-consuming and laborious. Intelligent document processing provides a solution for reducing bank efficiency ratio by streamlining complex document review tasks and extracting valuable information from bank documents. Intelligent Document Processing (IDP) can help reduce the bank efficiency ratio by automating the process of extracting data from documents such as invoices, bills of lading, and other financial documents related to trade finance, loan application, mortgage processing, etc. IDP can use techniques such as Optical Character Recognition (OCR) and machine learning to accurately extract data from these documents, reducing the need for manual data entry. With this type of IDP, you can improve data accuracy and completeness, reducing the risk of errors and inefficiencies in your financial processes. IDP can also integrate with other systems, such as accounting and ERP systems, to further automate and streamline financial processes. This can lead to improved efficiency and cost savings for the bank, ultimately reducing the bank efficiency ratio.
By automating manual reviews, intelligent document processing helps reduce the amount of time spent on tedious tasks such as reading through large amounts of text data. Rules-based systems can be used to validate extracted data against predefined criteria like total order value or other pricing parameters, helping businesses spot discrepancies quickly and rectify them accordingly. AI systems learn faster than traditional methods and thus require less training on new datasets while producing more accurate results at a quicker pace.
Furthermore, AI technologies combined with intelligent document processing can help institutions identify problems that may not have arisen in human review processes due to their capacity to analyze large volumes of invoices, contracts, bills, and other types of documents at incredible speeds. This helps financial institutions prevent issues such as fraudulent activities from occurring in the first place and therefore reduces the cost associated with correcting such matters after they arise.
With AYR’s advanced IDP that combines OCR, Computer Vision (CV), and Natural Language Processing (NLP) together, we can achieve the highest accuracy for information extraction in the industry.